Review of Capital Needs Inventory and Preliminary Capital Improvement Program

Transcription

1 Finance & Administration Committee Information Item IV-A November 3, 2011 Review of Capital Needs Inventory and Preliminary Capital Improvement Program Page 1 of 116

2 Washington Metropolitan Area Transit Authority Board Action/Information Summary Action Information MEAD Number: Resolution: Yes No TITLE: Review of CNI and Preliminary CIP PURPOSE: To provide an update to the Board of Directors on the six-year Capital Program: FY2011 Annual Budget Reconciliation Updated Capital Needs Inventory (CNI) Updated Capital Improvement Program (CIP) FY2013-FY2018 DESCRIPTION: As part of the annual budget process in each year during the term of the Capital Funding Agreement (CFA), Metro has reconciled the following transactions in the FY2011 CIP: Actual expenditures for projects and activities as compared to planned expenditures for such projects and activities Actual Allocated Contribution of each Contributing Jurisdiction as compared to the scheduled Allocated Contribution of each Contributing Jurisdiction Projected Allocated Contributions of each Contributing Jurisdiction Actual amount of Federal grant funds received as compared to the budgeted or projected amount of Federal grant funds Current forecast of expenditures Estimated cost to complete remaining projects and activities and expected sources of those funds The presentation will discuss the results for each transaction in the annual reconciliation. The CIP, as defined by the CFA approved on June 24, 2010, is a rolling six year program. On June 23, 2011, the Board approved the FY2012-FY2017 CIP. Prior to the commencement of FY2013, the Board of Directors will consider the next six year CIP, spanning from FY2013 to FY2018. In order to keep the Board informed of the budget development process, a forecast of the FY2013-FY2018 CIP is presented here along with an updated forecast of expenditures for the current fiscal year, FY2012. Page 2 of 116

3 In developing this CIP, a ranking process was used with input from the project community, Metro leadership and a cross-departmental team (the Capital Program Advisory Committee- Technical, or CPAC-T), representing 14 voting members from all aspects of the organization. Other budget timelines include the following: On October 14, Metro staff mailed the proposed FY2013-FY2018 CIP to the contributing jurisdictional per the Capital Funding Agreement In December, staff will deliver the Annual Work Plan to the jurisdictions per the Capital Funding Agreement In January 2012, the General Manager will deliver a proposed budget for review by the Board The FY2013-FY2018 CIP will be submitted for Board Approval in June 2012 FUNDING IMPACT: The forecasted budget for the FY2013-FY2018 CIP is 5.27 billion, which is a.09 million increase over the current approved FY2012-FY2017 CIP of 5.18 billion. RECOMMENDATION: Informational purposes only Page 3 of 116

4 Washington Metropolitan Area Transit Authority Review of Capital Needs Inventory and Preliminary Capital Improvement Program Finance and Administration Committee November 3, 2011 Page 4 of 116

5 Purpose Provide an update on the six-year Capital Program Background of Capital Needs Inventory (CNI) and Capital Improvement Program (CIP) Development FY2011 Annual Budget Reconciliation Updated Capital Needs Inventory Updated Capital Improvement Program FY Page 5 of 116

6 Background - Capital Needs Inventory Capital Needs Inventory (CNI) developed in 2009 Prioritized list of capital needs to maintain safety and reliability In-depth look at physical assets: vehicles, facilities, operating systems, IT, track and maintenance equipment 11.4 billion over 10 years Performance and customer/demand projects Performance= rehabilitation of 30-year old track, replacement of rail cars and buses and replacement/rehabilitation of oldest garages Customer/demand= fleet expansion, power upgrades, and safety and security enhancements Provided basis for Capital Improvement Program moving forward Page 6 of 116

7 Background - Capital Improvement Program Capital Improvement Program (CIP) began in FY billion over six years (FY ) Safety and urgent state of good repair projects from CNI Addressed need to replace, upgrade or rehabilitate old or outdated vehicles, facilities, track and customer amenities First year = 854 million Page 7 of 116

8 Background - Annual Reconciliation July 1, 2010, Metro and its jurisdictional funding partners entered into the Capital Funding Agreement (CFA) for Metro s Capital Improvement Program CFA requires annual reconciliation i of the following transactions in the CIP: Actual compared to planned expenditures for projects and activities Actual compared to scheduled Allocated Contribution of each Contributing Jurisdiction Projected Allocated Contributions of each Contributing Jurisdiction Actual compared to budgeted amount of Federal grant funds received Current forecast of expenditures Estimated cost to complete remaining projects/activities and expected sources of those funds Page 8 of 116

9 FY2011 Annual Reconciliation Summary Amended budget was 854 million 90% or 769 million obligated (45% increase from FY2010) 71% or 611 million expended d (60% increase from FY2010) 76 million or 9% of total program funds are net remaining assets 80% federal and 20% local Unexpended in FY2011 expected to be obligated and expended by end of FY2013 Estimate forecast to complete through FY2016 is 4.5 billion Page 9 of 116

10 FY2011 Review of Capital Project Delivery Program 88 new Hybrid Electric buses received All 241 planned MetroAccess vehicles received and placed into service Escalator replacements are ongoing at Foggy Bottom Station and modernizations were completed at Dupont Circle (mezzanine to platform escalators), Farragut North, Franconia-Springfield, Gallery Pl- Chinatown, Judiciary Square, Metro Center, Union Station, and Wheaton Stations Page 10 of 116

11 FY2011 Review of Capital Project Delivery Program (cont.) Design work commenced with extensive customer input on 7000 Series rail cars Track rehabilitation i work included replacement of: 72,544 linear feet of running rail (50% increase from FY2010) 22,070 fasteners (91% increase from FY2010) 14,564 track cross ties (102% increase from FY2010) 1,364 welds (1,086% increase from FY2010) Page 11 of 116

12 FY2011 Review of Capital Project Delivery Program (cont.) Completed kiosk enlargement at Rhode Island Station Installed concrete pavers and non-skid tiles at Shady Grove Station Launched new Intranet Portal, upgraded Maximo (Metro s Asset Management System), and implemented Metro ID Badge and Physical Access Control System IFO Enterprise Financial System Implementation Page 12 of 116

13 Budget vs. Actual Expenditures Table 1 - FY2011 Budget by Category (Dollars in millions) Adopted Current Through 06/30/10 Amended 06/30/11 % % Budget (1) Budget (2) Actual (3) Expended Obligated A. Vehicles / Vehicle Parts % 91.4% B. Rail System Infrastructure Rehabilitation % 100.0% C. Maintenance Facilities % 0% 84.6% D. Systems and Technology % 84.0% E. Track and Structures % 88.0% F. Passenger Facilities % 97.8% G. Maintenance Equipment % 71.2% H. Other Facilities % 58.3% I. Program Management % 62.6% J. Safety % 0.0% Total Use of Funds % 90.0% (1) Attachment 1 - Original Capital Funding Agreement (2) Budget adjusted by various amendments, reprogrammings, and Metro Matters rollover (3) Per PeopleSoft General Ledger (ACCT records) Variance between adopted and amended budget derived from Board approved Metro Matters rollover 132M, amendments 14M, and reprogramming 47M Page 13 of 116

14 Metro Supports the Region Metropolitan Washington Council of Government s Region Forward (2010) Regional sustainability, accessibility, and livability goals, targets, and indicators focused on transit and activity centers Metro s services and investments are critical to achieving the region s goals: Increasing transit mode share Providing access to regional activity centers Page 14 of 116

15 Metro Benefits the Region Saves the Capitol region millions of hours per day from being lost to traffic congestion Saves the average family thousands per year in car ownership and operating expenses Boosts property values; adding more value to residential and commercial properties within near rail stations Enables a wide variety of special events that would otherwise be difficult or impossible to serve Moves federal workers - 40% of the weekday trips on Metrorail are made by federal employees Without Metro, the region would need to build over 1,000 lane-miles of highway to maintain current speeds; equivalent to building two additional i Capital Beltways Page 15 of 116

16 Capital Needs Inventory FY ten-year CNI originally i totaled 11.4 billion when prepared in 2009 During the first year of the ten-year CNI, investments totaled 854 million Capital needs continue to grow Revisions to existing project needs, 0.4 billion 43 new projects (187 total) including NTSB Recommendations and State of Good Repair, 1.5 billion Updated ten-year CNI now totals 13.3 billion in 2011 Page 16 of 116

17 Capital Needs Inventory (cont.) Metro s Capital needs: 13.3 billion Performance/State of Good Repair Focus: Projects that maintain and replace assets on a regular life cycle basis to deliver the same level of service Customer/Demand Focus: Projects that help meet growing g ridership and improve the rider s experience Customer/ Demand Focus 3.2B 24% Performance/State of Good Repair Focus 10.1B 76% Safety needs are included d throughout h t the CNI Page 17 of 116

18 Capital Needs Inventory y( (cont.) Category ( in millions) Original Funded Additional Updated Funded Unfunded FY CIP CNI FY CIP CNI CNI (2009) FY Needs CNI (2011) FY Vehicle/Vehicle Parts 3,621 2, ,033 2,777 1,256 Rail System Infrastructure t Rehabilitation 1, , ,158 Maintenance Facilities 2, (161) 2, ,392 Systems and Technology 1, (120) Track and Structures , Passenger Facilities 1, , ,369 Maintenance Equipment Other Facilities Project Management and Support (4) Total 11,431 4,957 1,897 13,328 6,831 6,497 Page 18 of 116

19 Major Additions to Updated CNI Performance/State of Good Repair Projects: NTSB Recommendation Projects Escalator Replacement Yard System Renovations Utility Service Cable Replacement Upgrade TPSS Ventilation Systems Facilities Rehabilitation/Roof Management Radio Project - Supplemental Coverage Customer/Demand Projects: Access & Capacity Improvements (Union Station, Foggy Bottom, Gallery Place and Shady Grove) Construction of Core and System Capacity Improvements Page 19 of 116

20 Updated CIP FY Annual budget call to Capital project managers Continued Capital Program Prioritization Process, which started with the ARRA, CNI, and FY2011 CIP Agency goals linked to project prioritization CPAC-T recommendations to the Executive Leadership Team and GM/CEO Page 20 of 116

21 Capital Improvement Program The Updated d CIP FY Capital Budget Each year the six-year CIP is updated; new projects are evaluated against set criteria linked to Metro s goals Major objectives are safe and reliable service and maintain a state-of-good-repair Funding comes from (1) federal appropriations including Formula and PRIIA Grants, (2) state and local contributions, and (3) long and short-term borrowing The basis of this core program is the ten-year CNI Urgent state of good repair Page 21 of 116

22 FY Major Capital Projects Escalator Replacement NTSB Recommendations Red Line rehabilitation from DuPont Circle to Silver Spring Orange/Blue Line rehabilitation from National Airport to Stadium Armory Union Station and Gallery Place Access & Capacity Improvements (Planning/Engineering) 1000 Series Rail Car Replacement and HVAC Rehabilitation Rail Car Safety & Reliability Enhancements Page 22 of 116

23 FY Financial Plan The FY CIP is a six-year, 5.2 billion program that includes: 1. Federal Funds 14% 1.6 billion in Federal Formula Funds Other 900 million in Federal PRIIA grants 2. State t and Local Funds 391 million Formula match 900 million PRIIA match 675 million in System Performance Funds 38% State/Local 48% Federal 3. Other Funds 109 million from other sources, including Metro Matters rollover, CIP rollover, security grants, and real estate proceeds 636 million in debt-backed financing Page 23 of 116

24 FY Proposed Sources Sources ( in millions) FY2013 % FY Formula Grants % 1,565 PRIIA Grant % 900 CMAQ Grant 4 0% 17 DHS Grants 11 1% 15 State/Local Funds % 1,066 PRIAA Match % 900 CMAQ Match 1 0% 4 Other Funds 89 9% 109 Financing % 637 Total % 5,213 Page 24 of 116

25 FY Proposed Uses Category ( in millions) FY2013 CIP % FY CIP Vehicle/Vehicle Parts % 2,220 Rail System Infrastructure Rehabilitation % 772 Maintenance Facilities % 486 Systems and Technology % 514 Track and Structures 51 5% 359 Passenger Facilities 97 10% 437 Maintenance Equipment % 363 Other Facilities 23 2% 25 Project Management and Support 6 1% 35 Total % 5,213 Page 25 of 116

26 Risks to the FY Financial Plan Possible loss of 150 million in PRIIA plus 150 million local match Possible decrease in FTA Formula Funds Safety projects will be funded; all other projects vulnerable to cuts Customer impacts: More frequent train delays Worsening reliability Deteriorating station conditions Longer lines and less customer information Page 26 of 116

27 Next Steps October to December Present to local jurisdictions and Jurisdictional Coordinating Committee November Addendum publication of Capital Needs Inventory December Quarterly Capital Progress Update January 13 Present proposed p budget to FA Committee March & April Public hearings, if necessary June 2012 Board adoption of the FY2013 Operating and Capital Budgets July 1, 2012 FY2013 begins Page 27 of 116

28 Appendix A greater level l of detail is provided d in a supplemental l handout, as follows: Appendix 1: Annual Budget Reconciliation Appendix 2: Updated FY CIP Page 28 of 116

29 WASHINGTON METROPOLITAN AREA TRANSIT AUTHORITY REPORT ON THE FY2011 ANNUAL BUDGET RECONCILIATION PER THE CAPITAL FUNDING AGREEMENT June 30, 2011 Page 29 of 116

30 Table of Contents Introduction... 3 Findings... 3 Background... 3 Executive Summary... 6 Results... 7 Objective 1 Reconcile Budget vs. Actual FY2011 CIP Expenditures for Projects & Activities. 7 Objective 2 Reconcile FY2011 Actual vs. Budgeted CFA Contributions by Contributing Jurisdictions... 8 Objective 3 Projected Allocated Contributions... 9 Objective 4 Reconcile FY2011 Budget vs. Actual Amount of Federal Grant Funds Received 10 Objective 5 Current Expenditure Forecast...11 Objective 6 Reconcile Estimated Cost to Complete Remaining Projects & Activities by Contributing Jurisdiction for Remaining Term of the CFA...12 Appendix Attachment 1 Original Capital Funding Agreement...15 Appendix 1 FY2011 Budget Crosswalk by Project...20 Appendix 1.A FY2011 Expenditure Crosswalk by Project...23 Appendix 1.B FY2011 Budget and Expenditure by Project...26 Appendix 1.C FY2011 Actual vs. Planned by Category/Subcategory...29 Appendix 1.D FY2011 Capital Improvement Plan Reprogramming...31 Appendix 2 FY2011 Jurisdictional Contributions...33 Appendix 2.A FY2011 Jurisdictional Cash/Flow...33 Appendix 3 FY2011 Quarterly Jurisdictional Funding Breakdown Based on Blended Rate vs. Annual Work Plan...34 Appendix 4 CIP Project Sources of Funds...35 Appendix 4.A FY2011 Federal Grant Crosswalk...38 Appendix 5 Updated CIP FY Page 30 of 116

31 INTRODUCTION On July 1, 2010, the Washington Metropolitan Area Transit Authority (Metro) and its jurisdictional funding partners entered into an agreement aimed at meeting critical capital needs for the Metro system. Termed the Capital Funding Agreement (CFA), the six-year funding agreement requires Metro to reconcile actual and planned financial transactions for major expenditure and revenue items. This report presents the results of Metro s annual financial reconciliation of the Capital Improvement Program (CIP) for Fiscal Year FINDINGS The original CFA six-year budget, FY , was 4,953.7 million with 4,513.7 million allocated for projects and million reserved for debt service, which is anticipated to start in FY2013. Over the FY2011 period, Metro obligated million or 90.0% of the amended budget of million for projects. For the same period, Metro ultimately expended million or 71.5% of its amended budget. The FY2011 Annual Budget Reconciliation identified net remaining assets totaling 76.2 million or 8.9% of total funds approved by Metro s Board during the program s duration. Net available sources are 80.2% Federal and 19.8% jurisdictional. All funds unexpended in FY2011 will be expended by the end of FY2013. See Appendixes 2 and 2.A for details. BACKGROUND The following accomplishments were realized for FY2011 CIP see Appendixes 1.B and 1.C for details: Vehicle/Vehicle parts: These projects provide for the repair, replacement, enhancement, and major maintenance of railcars, buses, MetroAccess vehicles, and service vehicles. In FY2011, 83.1% of the amended budget of this category was spent while 91.4% was obligated. Accomplishments include the placement in service of 88 out of 120 new Hybrid Electric buses and 241 MetroAcess vehicles, the completion of rehabilitation and return to service of 32 compressed natural gas buses, and the rehabilitation, safety & reliability enhancement efforts of rail cars continued with the procurement of brakes, rail heating, ventilation and air conditioning systems, propulsion, and other components. Notice to Proceed was issued to Kawasaki Rail Car Inc., for design, manufacture, test, and delivery of 300 cars for the replacement of the 1000 Series rail cars. Rail System Infrastructure Rehabilitation: These projects provide for the major rehabilitation of large portions of individual Metrorail lines. In FY2011, 68.9% of the amended budget of this category was spent and 100% was obligated. Accomplishments include repairs to the deteriorated platforms on the Red and Page 31 of 116

32 Orange lines, station improvements to maintain reliable service between the New York Ave-Florida Ave-Gallaudet U and Rhode Island Ave-Brentwood Metrorail stations, upgrades to track circuit and train control between the Judiciary Square and Rhode Island Ave-Brentwood Metrorail stations, kiosk enlargement and installation of new bumpy tiles on the platform at Rhode Island Ave-Brentwood Station, upgrades to train control rooms and installation of communications cables on the Red Line. Maintenance Facilities: These projects provide for the major rehabilitation and enhancement of Metro s bus and rail maintenance facilities. In FY2011, 60.0% of the amended budget of this category was spent and 84.6% was obligated. Accomplishments include completion of the Greenbelt bus garage facility roof replacement and complete replacement of asphalt paving with concrete paving at the Four Mile Run bus garage. Systems and Technology: These projects provide for the replacement, enhancement, and upgrade of information technology systems, software, and equipment. In FY2011, 62.7% of the amended budget of this category was spent while 84.0% was obligated. Accomplishments include the completion of the new Bus Operations Control Center at the Carmen Turner Facility, launching of the new Intranet Portal, implementation of the Metro ID Badge and Physical Access Control System, purchase of Enterprise Network Monitoring Tools for the modernization of the storage area network, hiring of consultants to assist the IT Security staffing team to build a complete information security architecture, completion of procurement of the IBM Maximo Asset Configuration Manager Application for Rail Mileage-Based Asset Management, complete build and unit testing of all modules of the PeopleSoft Financial System, and enhancement of the SmarTrip Web Application to allow online loading. Track and Structures: These projects provide for the replacement, enhancement, and upgrade of rail right-of-way structures and equipment. In FY2011, 73.5% of the amended budget of this category was spent and 88.0% was obligated. Accomplishments include the welding of 1,510 open joints, rehabilitation of anchor bolts and drains on Minnesota Avenue and Grosvenor aerials, replacement of approximately 14,500 cross ties, replacement of approximately 71,300 linear feet of running rail, replacement of 42 turnouts, the repair of more than 2,400 leaks, repair or replacement of more than 2,100 chain markers/safety signs, and the replacement of nearly 22,000 fasteners through the Metrorail system. Passenger Facilities: These projects provide for the replacement, enhancement, and upgrade of infrastructure that directly impacts the Metro customer experience, such as elevators and escalators, fare collection equipment, station rehabilitation, and bicycle and pedestrian improvements. In FY2011, 69.4% of the amended budget of this category was spent while 97.8% was obligated. Accomplishments include major repairs, rehabilitations, and modernizations of elevators and escalators at 27 Metrorail stations and station enhancements were completed at 20 Metrorail stations. Page 32 of 116

33 Maintenance Equipment: These projects provide for the replacement and upgrade of equipment and systems need to maintain Metro vehicles and infrastructure. This category includes system enhancements to comply with recommendations made by the National Transportation Safety Board (NTSB). In FY2011, 48.2% of the amended budget of this category was spent and 71.2% was obligated. Accomplishments include completed program reviews related to NTSB recommendations for periodic comprehensive data, safety reporting, and hazard identification and resolution. Other Facilities: These projects provide for the replacement, enhancement, and upgrade of miscellaneous facilities used by Metro, including office and police facilities. In FY2011, only 15.3% of the amended budget of this category was spent while 58.3% was obligated. Accomplishments include the completion of the Bus Operations Control Center and the review and approval of the safety action plan for elevator rehabilitation at the Jackson Graham Building. Program Management: At this time, the only project in this category funds the fees required for Metro to maintain a line of credit necessary in order to finance capital improvements. In FY2011, 62.1% of the amended budget of this category was spent and 62.6% was obligated. The following CIP budget changes were made in FY2011 see Appendix 1.D for details: New Funds: Approximately 13.8 million in additional funds from sources other than jurisdictions provided for new projects. For example, nearly 8.1 million in insurance proceeds resulted in a new CIP for the repair of damaged railcars. Special grants funded 3.0 million for rail yard hardening and bus security, 2.4 million for transit asset management, and close to 0.4 million for electronic countermeasures. Board Approved Reprogramming: The Board approved 39.0 million in reprogramming that was available in the FY2011 CIP, which allowed for resources and cash management efficiencies. The most significant was the 15.7 million reprogramming for the NTSB recommendations. The projects that resulted from the NTSB recommendations included examination, repair, and replacement of track circuits, system safety analysis, cable testing and replacement, and other corrective action measures. Notably, 7.2 million was reprogrammed for the purchase of property adjacent to the Landover Bus Garage for a Metro Transit Police Department (MTPD) Facility. The facility not only houses approximately 70 employees of the MTPD Special Operations Bureau, but also provides parking for training buses and consolidation for the Office of Track and Structures operations. The reprogramming also included 5.7 million for high priority projects that included rehabilitation and repair at 21 parking garages and 29 surface parking lots. The work included sealing treatment, repair to expansion joints, signage, and pavement. In addition, this reprogramming also provided funding for the power conversion of the Operation Control Center at the Carmen Turner Facility. Page 33 of 116

34 GM/CEO Approved Reprogramming: The GM/CEO approved 10.1 million in reprogramming that was available in the FY2011 CIP. The most significant was the 4.7 million reprogramming for the expansion of parking lot credit card readers and parking automation. This effort included the installation of credit card readers and intercom/video feeds at parking fee collection lanes. EXECUTIVE SUMMARY The CFA requires Metro to prepare an annual financial reconciliation. Accordingly, this report details the following CIP reconciliations defined in Section 5(a) of the Agreement: 1. The actual expenditures for projects and activities under the current CIP to date, and for that fiscal year, as compared to the planned expenditures for such projects and activities for the same fiscal year, 2. The actual Allocated Contribution of each of the Contributing Jurisdictions to date, as compared to the scheduled Allocated Contribution of each Contributing Jurisdiction for the current CIP, 3. The projected Allocated Contributions for each contributing Jurisdiction for the current CIP, 4. The actual amount of Federal grant funds received for the CIP, as compared to the budgeted or projected amount of Federal grant funds for the same fiscal year, 5. The current forecast of expenditures, and 6. The estimated cost to complete the remaining projects and activities in the current CIP and expected sources of those funds. In addition to verifying financial transactions, the reconciliation provided may be used for determining the value of surplus or unrestricted cash assets that Metro s jurisdictional partners can either reallocate to meet future critical capital needs or receive in the form of a credit or refund. The surplus amount may be made available to the Contributing Jurisdictions only if there is no expectation that those funds will be needed within the next six succeeding quarters measured from Metro s fiscal year third quarter (beginning on January 1) and that the refund of the surplus will not result in Metro receiving less funds (including the surplus funds) than is required to be needed to meet the expected costs of the program over the next six calendar quarters. Page 34 of 116

35 RESULTS Based on the objectives of the reconciliation, Metro has performed the following procedures and noted the following results: 1. Objective: Reconcile Budget vs. Actual FY2011 CIP Expenditures for Projects and Activities through June 30, Procedures: The Board of Directors approved the original and amended FY2011 budget for all projects in the CIP. The Office of Management and Budget Services (OMBS) established Project ID Codes to identify each of the projects. The financial progress of each project, such as budget amendments and actual expenditures, are tracked in the financial system. OMBS and Accounting (ACCT) performed a comprehensive review of reported actual expenditures to ensure proper classification of expenditures by Project ID Code. Results: Table 1 summarizes the FY2011 original budget, amended budget, and actual expenditures by category and reflects percentage of amended budget spent. Table 1.1 provides a budget crosswalk by category for FY2011. Appendix 1 displays a detailed budget crosswalk by project for FY2011 and Appendix 1.A details the expenditure crosswalk by project for FY2011. Table 1 - FY2011 Budget by Category (Dollars in millions) Adopted Through 06/30/10 Amended 06/30/11 % Budget (1) Budget (2) Actual (3) A. Vehicles / Vehicle Parts % B. Rail System Infrastructure Rehabilitation % C. Maintenance Facilities % D. Systems and Technology % E. Track and Structures % F. Passenger Facilities % G. Maintenance Equipment % H. Other Facilities % I. Program Management % Total Use of Funds % (1) Attachment 1 - Original Capital Funding Agreement (2) Budget adjusted by various amendments, reprogrammings, and Metro Matters rollover (3) Per PeopleSoft General Ledger (ACCT records) Page 35 of 116

36 Table FY2011 Budget Crosswalk by Category (Dollars in millions) Original Rollover (1) (2) Amendments Reprogramming Amended A. Vehicles / Vehicle Parts (5.2) B. Rail System Infrastructure Rehabilitation C. Maintenance Facilities (18.4) 58.1 D. Systems and Technology E. Track and Structures F. Passenger Facilities G. Maintenance Equipment (1.7) 42.7 H. Other Facilities I. Program Management (1.0) 4.0 Total (1) Attachment 1 - Original Capital Funding Agreement (2) Metro Matters rollover (purchase orders only) The variance between the original budget and the amended budget derived from Board and GM/CEO approved adjustments: (1) FY2010 Metro Matters Rollover Metro Matters funds obligated but not expended during the 2010 fiscal year (2) Amendments Additional funds received from sources other than jurisdictions, such as special grants and insurance proceeds (3) Reprogramming Overall net zero adjustment to program budget, but adjustments between projects/categories for cash management and program efficiency 2. Objective: Reconcile Actual vs. Budgeted Contributions by Contributing Jurisdictions through June 30, Procedures: Budgeted Contributions per the respective Jurisdictions were detailed in the original CFA. ACCT prepared jurisdictional contribution billings, which are recorded as receivables in the General Ledger, based on the December 2010 expenditure forecast from the Annual Work Plan (AWP). The Office of the Treasurer (TRES) collected records of payments from the jurisdictions. ACCT reconciled the receipts with billings that came from a General Ledger report. Results: See Table 2 for summarized activity by jurisdiction. See Appendix 2 for detailed cash activity. Page 36 of 116

37 Table 2 - Allocated Contributions by Jurisdiction (Dollars in millions) Original CFA Annual Work Plan Billed to Un- (1) (2) Jurisdiction Expended Expended District of Columbia Montgomery County Prince Georges County Maryland Alexandria (3) Arlington County City of Fairfax Fairfax County Falls Church Virginia Total (1) Original Capital Funding Agreement (CFA) (2) Adjusted with 3rd Quarter billing per CFA during Annual Budget Reconciliation (3) Alexandria's contribution for FY11 Q4 for 2.6 million was made according to the Scheduled Allocation in the CFA, presented as Option B. No other Jurisdictions exercised the Option B payment plan, which was based on Fiscal Year 2011 allocations as defined in the adopted FY2011 Budget and the difference between the invoiced amount and Option B was credited towards future FY 2012 billings. No variances reported after accounting for interest credits and usage of additional fund sources in lieu of contributions. 3. Objective: Projected Allocated Contributions Procedures: In November 2010, updated expenditure forecasts were obtained from project managers for the period starting second Quarter of FY2011 through the fourth Quarter of FY2012, for each CIP project. For the first Quarter of FY2011, actual expenditures were used in place of budget or forecast amounts. The Federal grant funding needs for the following six quarters (starting from the third Quarter of FY2011 to the fourth Quarter of FY2012) were determined by applying all available funding sources to the updated expenditures and forecasts, such that Federal grants were used first on eligible projects. The State and Local match that would be needed to use the Federal sources was then determined based on FTA requirements for each type of grant. System Performance funds were used to fund projects that were not included (or planned to be included) in the Federal grant applications and those that required funding in addition to allocated Federal sources. The allocation of the local funding contributions, including both the Federal formula match and System Performance funds, was based on the blended shares defined in the 2010 CFA. For PRIIA match, the contributions were divided equally between the District of Columbia, State of Maryland, and the Commonwealth of Virginia, as per the funding agreement. Results: See Table 3 for a summary of the contributing jurisdictions projected allocated contributions. See Appendix 3 for details. Page 37 of 116

38 Table 3 - FY2011 Annual Jurisdictional Contribution Amounts (Dollars in thousands) Blended Rate AWP Difference District of Columbia District of Columbia 48,045 48,088 (44) District of Columbia - PRIIA Match 44,284 44,284 - Total District of Columbia 92,328 92,372 (44) Maryland Montgomery County 22,288 22, Prince Georges County 24,539 24, State of Maryland - PRIIA Match 44,284 44,284 - Total Maryland 91,111 91, Virginia Alexandria 5,265 5,278 (13) Arlington County 9,844 9,875 (30) City of Fairfax (1) Fairfax County 17,449 17,460 (10) Falls Church (1) Commonwealth of Virginia - PRIIA Match 44,284 44,284 - Total Virginia 77,519 77,574 (55) Total State and Local Funds: 260, , Objective: Reconcile Budget vs. Actual Amount of Federal Grant Funds Received through June 30, Procedures: Budgeted Federal grants were detailed in the original CFA and subsequent revisions were included in annual budgets. ACCT established an Accounts Receivable (AR) account for the Federal portion of the grants in the General Ledger. The account information included the Federal Transit Administration (FTA) grant number, customer identification number, and fund code. The amount recorded in the AR account is the total amount of the Federal portion of the grant. ACCT reconciled from the Accounts Receivable Ledger to received Federal grant funds as tracked by Treasury. The FTA s grant system, TEAM, is used by the OMBS Grants section to review awarded grant amounts and resolve variances noted during the reconciliation. Results: See Table 4 for Federal grant funds, Appendix 4 for expenditures by fund source and Appendix 4.A for grant crosswalk. Page 38 of 116

39 Table 4 - FY2011 Federal Grant Funds (Dollars in millions) Original Revised Awarded Receipts Balance (1) (2) (3) (4) (5) Federal Formula Grant Funds State of Good Repair Federal Safety & Security Grants PRIIA Grant Funds Prior Year Grants (6) Total (1) Attachment 1 - Original Capital Funding Agreement (2) Revised to include rollover funds and other Federal grants received throughout the Fiscal Year (3) Actual FTA grant awards (4) FTA portion of GL grant cost (5) Balance - difference between funds awarded and receipts (6) Awarded prior to FY2011 relating to Metro Matters rollover Variances between grant receipts and grant expenses reported reflect timing differences between the time the expenditures were processed in PeopleSoft and the time the funds were actually reimbursed by the funding agency. 5. Objective: Current Forecast of Expenditures Procedures: Quarterly, project managers are solicited to provide updated quarterly project expenditure forecasts for their respective projects for the current year and the year after (FY2012 and FY2013). Annual expenditure projections based on approved scope from two years through six years after the current year (FY2014 through FY2018) are also collected. Forecasts are based on the actual project costs and when those costs will be incurred. The forecast is vetted by Metro and any irregularities are addressed with individual project managers. Results: See Table 5 for expenditure forecast and Appendix 5 for Updated CIP FY Table 5 - Current Forecast of Expenditures (Dollars in millions) Original Forecast Budget (1) Budget (2) A. Vehicles / Vehicle Parts 2, ,777.2 B. Rail System Infrastructure Rehabilitation C. Maintenance Facilities D. Systems and Technology E. Track and Structures F. Passenger Facilities G. Maintenance Equipment H. Other Facilities I. Program Management J. Safety - - Total Use of Funds 4, ,831.2 (1) Attachment 1 - Original Capital Funding Agreement (FY ) (2) FY Updated CIP Page 39 of 116

40 6. Objective: Reconcile the Estimated Cost to Complete the Remaining Projects and Activities by Contributing Jurisdiction for the Remaining Term of the CFA (FY2016). Procedures: Project managers provide updated forecasts by project. The estimated cost to complete the remaining projects for the term of the CFA is calculated by subtracting the current forecast of expenditures through FY2016 from the original FY CIP as defined in the CFA. Results: See Table 6 for estimated cost to complete remaining projects and Table 6.1 for estimated cost to complete by funding source. Table 6 - Estimated Cost to Complete (Dollars in millions) Original Forecast Budget (1) Budget (2) A. Vehicles / Vehicle Parts 2, ,693.8 B. Rail System Infrastructure Rehabilitation C. Maintenance Facilities D. Systems and Technology E. Track and Structures F. Passenger Facilities G. Maintenance Equipment H. Other Facilities I. Program Management J. Safety - - Total Use of Funds 4, ,116.2 (1) Attachment 1 - Original Capital Funding Agreement (FY ) (2) FY from Updated CIP (FY ) Page 40 of 116

41 Table Estimated Cost to Complete by Funding Sources (Dollars in millions) Original Forecast Budget (1) Budget (2) Federal Funds: Federal Formula Grants 1, ,487.5 Federal PRIIA Grant FTA State of Good Repair Grant Federal TIGER Grant Federal Safety & Secuirty Grants Federal Bus Grants Subtotal 2, ,443.1 State and Local Funds: Match to Federal Formmula Grants Match to Federal Bus Grants System Performance Funds Match to Federal PRIIA Grants Subtotal 1, ,954.2 Misc. CIP Funding Debt Strategy Total Source of Funds 4, ,116.2 (1) Attachment 1 - Original Capital Funding Agreement (FY ) (2) FY from Updated CIP (FY ) Page 41 of 116

42 Appendix Page 42 of 116

43 Attachment 1 Initial Capital Improvement Program: (from Capital Funding Agreement) Use of Funds (Dollars in millions) A Annual Work Plan Year: FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Total Budget Forecast Forecast Forecast Forecast Forecast FY Vehicles/ Vehicle Parts Replacement of Rail Cars CIP Series Rail Car Replacement CIP Series Rail Car Replacement Subtotal Replacement of Buses CIP 006 Bus Replacement Subtotal Rehabilitation of Rail Cars CIP Series Rail Car HVAC Rehabilitation CIP /3000 Series Rail Car Mid-Life Rehabilitation CIP 067 Rail Car Safety & Reliability Enhancements CIP 063 Rail Rehabilitation Program CIP 125 Rail Lifecycle Overhaul Subtotal Rehabilitation of Buses CIP 005 Bus Rehabilitation Program CIP 008 Bus Repairables CIP 137 Bus Lifecycle Overhaul Subtotal Replacement of MetroAccess Vehicles CIP 015 MetroAccess Fleet Replacement Subtotal Replacement of Service Vehicles CIP 009 Service Vehicle Replacement Subtotal Rail Car Fleet Expansion CIP Series Rail Car Procurement CIP % 8-Car Train-- Rail Cars (7000 Series) Subtotal Bus Fleet Expansion CIP 003 Bus Capacity Enhancements: Fleet Expansion Subtotal Bus Enhancements CIP 001 Antenna Reduction/ Security Enhancements CIP 002 Automatic Vehicle Location Equipment Replacement CIP 007 Bus Camera Installation Subtotal Subtotal , B Rail System Infrastructure Rehabilitation Rail Line Segment Rehabilitation CIP 108 Rail Rehabilitation Tier 1: Dupont to Grosvenor CIP 107 Rail Rehabilitation Tier 1: Dupont to Silver Spring CIP 110 Rail Rehabilitation Tier 1: National Airport to Stadium Armory Subtotal Subtotal C Maintenance Facilities Rehabilitation and Replacement of Bus Garages CIP 085 Royal Street Bus Garage Replacement (Cinder Bed Road) CIP 086 Southeastern Bus Garage Replacement (DC Village) CIP 084 Southern Avenue Bus Garage Replacement Subtotal Maintenance of Bus Garages CIP 119 Bus Garage Facility Repairs Tier 1: Western, Northern and Lan Subtotal Page 43 of 116

44 Initial Capital Improvement Program: (from Capital Funding Agreement) Use of Funds (Dollars in millions) Annual Work Plan Year: FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Total Budget Forecast Forecast Forecast Forecast Forecast FY Maintenance of Rail Yards CIP 116 Rail Yard Facility Repairs Tier 1: Alexandria, Brentwood and N Subtotal Rail Maintenance Facilities CIP 071 Test Track & Commissioning Facility Subtotal Environmental Compliance Projects CIP 010 Environmental Compliance Projects CIP 011 Underground Storage Tank Replacement Subtotal Maintenance Bus and Rail Facilities CIP 127 Support Equipment - MTPD CIP 126 Financial Planning, Project Administration, and System Wide I Subtotal Expansion of Bus Garages CIP 078 Bladensburg Shop Reconfiguration CIP 038 Bus Garage Capacity Enhancements Subtotal Subtotal D Systems and Technology Power System Upgrades - Rail CIP Car Train Power Upgrades CIP % 8-Car Train - Power Upgrades Subtotal Operations Support Software CIP 042 Bus & Rail Asset Management Software CIP 043 Bus Operations Support Software CIP 044 Customer & Regional Integration CIP 045 Data Centers and Infrastructures CIP 047 Enterprise Geographic Information System CIP 052 Network and Communications CIP 053 Network Operations Center (NOC) CIP 051 Police Dispatch and Records Management CIP 140 Rail Mileage Based Asset Management CIP 056 Rail Operations Support Software Subtotal Business Support Software & Equipment CIP 030 Currency Processing Machines CIP 054 Customer Electronic Communications & Outreach CIP 046 Document Management System CIP 049 Management Support Software CIP 050 Metro IT OneStop and Office Automation CIP 103 Police Portable Radio Replacement CIP 048 Sensitive Data Protection Technology Subtotal Rail Fare Equipment CIP 091 Automatic Fare Collection Machines CIP 031 Debit/Credit Processing Requirements CIP 092 Ethernet Wiring for Rail Fare Machines CIP 032 Fare Media Encoders CIP 094 Improvements to Coin Collection Machines CIP 093 Integrating regional NEXTFARE System CIP 097 Open Bankcard and Automatic Fare Collection Systems Subtotal Subtotal E Track and Structures Track Rehabilitation CIP 023 Third Rail Rehabilitation CIP 089 Track Fasteners CIP 019 Track Floating Slab Rehabilitation CIP 021 Track Pad/Shock Absorber Rehabilitation CIP 024 Track Rehabilitation CIP 022 Track Structural Rehabilitation CIP 141 Cheverly Abutment CIP 018 Track Welding Program Subtotal Page 44 of 116

45 Initial Capital Improvement Program: (from Capital Funding Agreement) Use of Funds (Dollars in millions) Annual Work Plan Year: FY2011 FY2012 FY2013 FY2014 FY2015 FY2016 Total Budget Forecast Forecast Forecast Forecast Forecast FY Station/Tunnel Rehabilitation CIP 026 Station/Tunnel Leak Mitigation Subtotal Subtotal F Passenger Facilities Elevator/Escalator Facilities CIP 072 Elevator Rehabilitation CIP 132 Elevator/Escalator Repairables CIP 073 Escalator Rehabilitation Subtotal Maintenance of Rail Station Facilities CIP 138 System-wide Infrastructure Rehabilitation CIP 087 Station Rehabilitation Program Subtotal Bicycle & Pedestrian Facilities CIP 035 Bicycle & Pedestrian Facilities: Capacity Improvements CIP 036 Replacement of Bicycle Racks & Lockers Subtotal Rail Station: Capacity/Enhancements CIP 039 Core & System Capacity Project Development CIP 074 Installation of Parking Lot Credit Card Readers CIP 088 Station Entrance Canopies Subtotal Bus Priority Corridor Improvements CIP 037 Bus Priority Corridor Network Enhancements Subtotal Rail Station Equipment CIP 099 Police Emergency Management Equipment Subtotal Subtotal G Maintenance Equipment Rail Maintenance Equipment CIP 136 FCC Radio Frequency Communication Changes CIP 065 Geometry Vehicle CIP 139 NTSB Recommendations CIP 066 Rail Shop Repair Equipment CIP 020 Replacement of Rail Track Signage CIP 027 Switch Machine Rehabilitation Project CIP 025 Track Maintenance Equipment CIP 135 Train Control Signal CIP 133 Wayside Work Equipment Subtotal Bus Repair Equipment CIP 004 Bus Repair Equipment Subtotal Business Facilities Equipment CIP 028 Materials Handling Equipment CIP 029 Warehouse Vertical Storage Units/Shelving Subtotal Subtotal H Other Facilities Business Support Facilities CIP 134 Carmen Turner Facility Parking Garage CIP 080 Jackson Graham Building Renovation CIP 033 Replacement of Revenue Facility Equipment CIP 034 Revenue Collection Facility (RCF) Building Expansion Subtotal MTPD Support Facilities CIP 101 Police Substation - New District 2/Training Facility CIP 102 Police Substation - New District CIP 100 Police Training Facility CIP 106 Special Operations Division Facility Subtotal Subtotal Page 45 of 116